If you take a closer look at their financial data, you'll find that it's quite a bit better than what people repeat.
In Fiscal Year 2018, they had positive operating cash flow of $2.1 billion. Part of the reason for the difference between accounting earnings (a loss) and actual cash flow is the huge depreciation charges ($1.9 billion) for historical capital expenditures, versus present-day cash outflows.
In that year, Tesla still spent a lot of cap-ex dollars on Model 3 capacity and battery capacity (to the tune of $2.3 billion), so overall cash flow was slightly negative - about $200 million for the year, off of $21 billion in revenue.
In the six months since then, they're reported additional positive operating cash flow: $224mm off of $10.9 billion in revenue.
This is a company experiencing 47% y/y revenue growth for the first half of the year. Yes, they're spending on cap-ex, but they are producing positive operating cash flow and their total operating+cap-ex cash flow is running a little in the red, but <1% of revenues.
And in context, they have $5 billion in cash and $10 billion in short term assets.
For a company not at significant financial risk why is their credit rating so low? Investors shouldn't be concerned about repayment if Tesla is likely to remain solvent.
In Fiscal Year 2018, they had positive operating cash flow of $2.1 billion. Part of the reason for the difference between accounting earnings (a loss) and actual cash flow is the huge depreciation charges ($1.9 billion) for historical capital expenditures, versus present-day cash outflows.
In that year, Tesla still spent a lot of cap-ex dollars on Model 3 capacity and battery capacity (to the tune of $2.3 billion), so overall cash flow was slightly negative - about $200 million for the year, off of $21 billion in revenue.
In the six months since then, they're reported additional positive operating cash flow: $224mm off of $10.9 billion in revenue.
This is a company experiencing 47% y/y revenue growth for the first half of the year. Yes, they're spending on cap-ex, but they are producing positive operating cash flow and their total operating+cap-ex cash flow is running a little in the red, but <1% of revenues.
And in context, they have $5 billion in cash and $10 billion in short term assets.
Tesla is not at significant financial risk.